AIG struggling to sell assets, may not be able to pay back Treasury at all

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Nov. 6 (Bloomberg) -- American International Group Inc., the insurer taken over by the U.S. government, may have to renegotiate terms of its $85 billion rescue as the company struggles to find buyers for some of its units.

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Chief Executive Officer Edward Liddy has yet to announce the sale of a business after saying in September he might disclose transactions that month. New York-based AIG got an $85 billion loan on Sept. 16 to stave off bankruptcy and two additional U.S. credit lines totaling $58.7 billion last month to make up for further losses. AIG owed $81.2 billion on two of the credit lines, the Federal Reserve said today.

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While losses mount at AIG, the company's competitors have less buying power because of lower stock prices and the increased cost of borrowing.

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AIG spokesman Joe Norton and Andrew Williams, a spokesman for the Federal Reserve Bank of New York, declined to comment.

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AIG, once the world's largest insurer, could raise $115 billion by disposing of all its units, Thomas Gallagher, an analyst at Credit Suisse Group AG, estimated in September.

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Taxpayers may lose money unless the AIG bailout is restructured to reduce the need for quick sales, said shareholders including former CEO Maurice "Hank'' Greenberg, who controls the largest block of privately held AIG stock.

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"If they just let AIG work through their issues over a lengthier period of time, it would provide the government with a greater opportunity to recover its capital,'' UBS analyst Andrew Kligerman said in an interview.

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AIG agreed in September to turn over an 80 percent stake to the U.S. after running short of cash because credit-rating downgrades forced the insurer to post more than $10 billion in collateral to clients who bought protection on bonds.

http://www.bloomberg.com/apps/news?pid=206...No&refer=us

[almaty 19]

great...that sound like socialism...

oh wait, there was a gop in the white house..sounds like progressive capitalism..

[Trumplestiltskin 5,791]

Well this obviously explains some of the opposition to the bailout... I was a bit skeptical when Bush claimed that *most* of the bailout money will be repaid.

We should get it all back - if not now, then when the economy gets back on track.

[Mr. Big Dog 10,747]

I think the fine folks at AIG need to retreat to a fancy resort to figure out what to do next.

[Niels Bohr 72]

$85 Billion dollars loan from the Treasury? Geezes, it's going to richochet into very high inflation.

[Trumplestiltskin 5,791]

I think the fine folks at AIG need to retreat to a fancy resort to figure out what to do next.

They've already had a couple of those, since the bailout was announced...

There was a great hit piece on the news recently - where a TV news crew got into a high-end party in NYC and videotaped Wall Street Execs drinking champagne and smoking fat cigars.

[Amby 490]

American General which is a subsidiary of AIG has their headquarters here in Evansville and several of my friends work there. They are laying off loads of people every week. I personally know four people that have lost their jobs in the past two weeks.

[mRx 16]

We should get it all back - if not now, then when the economy gets back on track.

These companies failing, and the companies insuring them also failing (AIG), is the only way the economy can get back on track.

When you make bad financial decisions, you're gonna lose. But in this case, you can lose all you want, because you don't bear responsibility for your risky choices, we the taxpayers do.

Can't really blame the execs though, if the government absolved my failing company of it's insurmountable debt, I'd go on a vacation too.

The corporate elite are only a symptom of the problem, not the problem itself.

[Trumplestiltskin 5,791]

I think the problem with AIG collapsing is how much of an impact its collapse would have on the rest of the world, mass unemployment, a guaranteed world-wide recession (or worse).

The government stepping in with its bailout plan - might have been necessary to try to change the course of the ship or mitigate the damage (this is certainly how its presented), but its looking increasingly like a desperate measure for what has become a desperate problem.

If AIG does collapse - even after the bailout, it would be like trying to pump water out of the Titanic.

The choices seem to be - brace for a really really bad economic situation, or pull out all the stops for a marginally less $hitty outcome.

[NickD 203]

AIG is still advertising on TV that you can save $560.00 per year if you switch your Auto insurance over from GEICO, maybe they should cut that down to $200.00 per year.

[Trumplestiltskin 5,791]

AIG is still advertising on TV that you can save $560.00 per year if you switch your Auto insurance over from GEICO, maybe they should cut that down to $200.00 per year.

Nah - they'll keep the advertising going to hook you in, and then you discover that not only are you not saving money with Geico but your premium is $50 more a month than what you're already paying...

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AIG repays more of $85 billion Fed loan